10-4

  • Rate Cut probability for October 83% up from 50%1 week ago, December @ 52. %
  • Yesterday Vice Chairman of the Fed Clarida said, “The Economy is on a good place, the consumer is in good shape, inflation stable” (Bloomberg) he also went on to say we will have something to say regarding the balance after October meeting. Based on the above probabilities for a cut nothing in Clarida interview has changed expectations for rate cut.
  • A surprise in today’s payrolls would be an above expectations number, unlike previous reports the focus will be on jobs created with Wage data taking a back seat. Worries about growth of the economy or stagnation of Economy is what markets are worried about after this week’s ISM data. Markets are braced for a poor report
  • Spoos might  have the cleanest response of any assets bad is bad and good

A bit of Wiggle in Bunds last night as they rallied along with JGBs as BOJ did not cut JGB purchases as some expected. Spoos -9 handles, Oil, gold, treasuries, and copper steady. A bit of Fed speak today Powell makes a few comments at 1:00 before a fed listens forum unlikely to say anything market moving. Once payrolls digested, attention will turn back to any trump tweets and comments regarding Impeachment

Fed calendar:

  • 7:30 Rosengren
  • 9:25 Bostic
  • 1:00  Powell

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